Accounting Project-Clubs free essay sample

The club also gets money if they win a tournament. What are the club’s main items of expenditure? ?As the club enters tournaments it has to pay Affiliation fees. The club has to pay these fees to compete against other teams in the area. This fee is paid to the organising body. ?The club also has to pay Honorarium. This is paid to people who have delivered a service to the club. E. g. secretary or treasurer. ?The club also spends money on refreshments. Soccer balls. ?Water and electricity. ?Medical equipment such as first aid kits. ?Travelling expenses when the team plays somewhere. ?Maintenance of the building ( paint, varnish etc ). What recording systems does the club use to record incomes and expenses? Usually a simple system of bookkeeping is followed. First we; ?Distinguish clearly between receipts and income. Receipt are all monies that are received which include all cash transactions, irrespective of the related period or the nature thereof. We will write a custom essay sample on Accounting Project-Clubs or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Income refers to the amounts received or receivable i. e. arned while conducting our business. Examples are membership fees, donations, sale of refreshments or discount received. Income is a gain for the club and will therefore increase the surplus. When we sell an asset it is not regarded as an income. Income accounts are entered on the Credit side of the Nominal section of the General Ledger. Next we; ?Distinguish between payments and expenditure. Payments are all monies paid in cash, cheque, postal order or direct transfer. Expenditure refers to the amounts paid or payable e. g. wages, rent expenses, interest expenses, stationery etc. These expenses are incurred while running the club and are necessary in order to generate income. They are either used up quickly or have no lasting income e. g. electricity. Expenses are a loss to the club and therefore decrease the surplus. ?In this club an Income and Expenditure statement and a Balance Sheet is made. Ledger accounts are also opened. A Cash Receipts journal, a Cash Payments journal and a General Journal is used. Daily and monthly, receipts are issued and recorded in journals then in the general ledger then in the trial balance. At the end of the financial year adjustments are made, a post adjustments trail balance is drawn up, closing entries are made, an Income and Expenditure account is drawn up, a post closing trail balance is drawn up and finally an Income and Expenditure Statement Balance Sheet is drawn up. ? Unlike in a business, a surplus or deficit is made not a profit or a loss. What control measures are in place in the keeping of the ledgers? ?There must be accurate bookkeeping entries of all receipts and payments. ?There must be proper control over all cash receipts and payments. There must be proper documentation of all transactions. ?Periodically, as a rule annually, financial statements must be presented to the members. What is the club’s policy regarding membership fees? Membership fees are collected at the beginning of the financial year. Any membership fees that are not received are recorded as an accrued income. Sometimes members pay membership fees for the next year and this is rec orded as income received in advance. ? If you have accrued income from the previous year it must be subtracted from the opening balance of the new year. If you have income received in advance from last year it must be added to the opening balance of the new year. ? If you have accrued income for the current year it must be added to your membership fees. ?If you have income received in advance from the current year it must be subtracted from your membership fees. ?When you write members off it must be added to your membership fees because their accrued income that you subtracted must now be cancelled. This is all recorded in the ledger. What is the stock holding policy and how is the selling price determined? When stock is bought the amount is recorded. Every time we sell or buy stock it is recorded. Stock is seen as an expense. At the end of the year a physical stock take is taken. Then whatever is on hand is subtracted from the stock(sales) thus decreasing the expense. If you have stock on hand at the beginning of the year from the beginning of the year it can be seen as your opening balance on the Debit side of the ledger. Whenever you sell stock it is entered on the Debit side by decreasing the expense and whenever you buy stock it is entered in the Credit side and increases the expense. The selling price is determined by how much money is needed to cover expenses. If the membership fees and entrances fees do not cover all the club’s expenses, the mark-up (selling price-cost price) is determined by finding out what is required to cover the remaining expenses. What control measures are used in the shop? The shop assistant will be there to assist shoppers as well as keep an eye on customers. The cashier will deal with the sales and record all the sales for the day. A different person will cash the money and check that the amounts recorded match up with physical amount of money. Then a different person will cash the money. The accountant will then do the books each month and the treasurer will check that everything is balanced and accurate. The reason for different people doing everything is so that no one can crook the books. What control measures are used in the tuck-shop and coffee bar? The sales are recorded just like in the shop except we require more people to serve the customers and stock take cannot be done as regularly. Expenses cannot be recorded as accurately because we cant measure the exact amount of coffee granules used everyday because not every cup of coffee made contains the exact same amount of coffee granules. The refreshments sold and bought are recorded when the transactions happen but stock takes are not done every month because there are too many items to count. What staff does the club have and what control measures are put into place in this respect? The club has employees who work in the shop, tuck-shop as well as the coffee bar. The club also has a secretary and a treasurer. There are also people who work on maintaining the fields and the building. There are also coaches. All these people are paid an Honorarium in respect of the service they do for the club. Introduction In this project I will be answering a series of questions that will help the auditor find out where the misappropriation of funds could be . These questions are about where our incomes come from and expenses come from. They also deal with what we are doing in the club to control our books and employees. Conclusion While answering the questions I have discovered that while our control measures when it comes to bookkeeping are good we need to have better control measures when it comes to the stock as well as staff who work for us. Contents ?Introduction What is the club’s main source of income? ?What are the club’s main items of expenditure? ?What recording system does the club use to record incomes and expenditure? ?What control measures are in place in the keeping of ledgers? ?What is club’ policy regarding membership fees? ?What is the stock holding policy and how is the selling price determined? ?What control measures are used in the shop? ?What co ntrol measures are used in the tuck-shop and coffee bar? ?What staff does the club have and what control measures are used in this respect? ?Conclusion?